Buying property can be a dangerous territory to navigate when you have no experience.
Like all investments, it requires a keen understanding to reap its rewards and this will only happen if you understand the intricacies involved. The key is to avoid making these mistakes:
- Failing to do your research – Sounds like homework? Well, it is. You need to gain an in-depth knowledge of the property market and if there’s a specific area you are looking at, home in on important factors like property values, facilities and properties for sale.
- Not planning adequately – You can’t wake up one day and invest in a property. You need to decide on your investment duration and what you’d like back in the time. You also need to look at what you can afford without incurring unmanageable debt.
- Taking too long to decide – Once you know a property is for you, don’t procrastinate. If you keep viewing properties and can’t seem to pick one, perhaps you need to re-evaluate your plan. You could miss out on good deals if you keep turning them down.
- Not understanding how different properties work – Residential properties come in different structures. There are free-standing houses, attached properties and properties in a complex. All these vary in cost and some might involve additional levies.
- Thinking that you can do this alone – Investing without professional advice may seem like a cost-saving, but in the long run can cost you more. Experts have a wealth of experience and understanding, giving you peace of mind, minus the stress and anxiety.
- Not calculating the costs properly – Every cost adds up and ultimately what you spend should be less than what you’ll gain. Failing to calculate all the costs involved means you could miss out on the returns of your investment.
- Not understanding tax implications – There are tax implications when investing in property. It’s crucial to consult a tax advisor to ensure you maximise any returns due.
- Being emotional, instead of practical – Some properties you just fall in love with. But this property isn’t one that you are going to live in. You need to be broad-minded and think of the appeal of the property to the target market for that area. Be sensible before you buy.
- Not assessing property thoroughly before you buy – Inspect a property thoroughly before investing in it. Can you renovate it and make a profit? Is it still a good investment?
- Not understanding how property values fluctuate – Depending on the area and market, your property value could go up or down. You need to look at the projected trends and plan for this. Some years will be better than others. You can’t control these factors but you can control how you deal with them.
Related Tag: Property Investment in Sydney